What is the difference between hazard insurance and homeowners insurance?

Depending on the source, the terms hazard insurance and homeowner's insurance mean the same thing or describe two very different products. Both mortgage and insurance companies use both terms, but not in the same way, so it depends on the context in which you see the terms.

Homeowner's Insurance: One Definition

Insurance companies use the term homeowner's insurance to refer to a standard homeowner's insurance policy that provides financial coverage against hazards such as fire, hail, burst pipes, etc. Considered a package policy, it covers property damage to the home and its contents, and your liability for injuries occurring within the home. It does not cover the specific natural hazards of flood or earthquake which require separate policies. Damages caused by poor maintenance are also not covered.

Mortgage Companies' Definition

Mortgage companies use the term homeowner's insurance to refer to a standard homeowner's insurance policy or a dwelling policy. They also use it as a synonym for hazard insurance.

Hazard--Insurance Company Definition

Insurance companies use the term hazard insurance to refer to policies that cover specific natural hazards, including flood and earthquake. The U.S. federal government requires anyone owning a home in certain flood zones to purchase flood insurance. In most areas this will be through the National Flood Insurance Program (NFIP), but some areas do not participate in the program, and insurance must be purchased through a non-participating insurance company. Earthquake insurance may be purchased from any insurance company.

Hazard, Per the Mortgage Company

Mortgage companies use the term hazard insurance to refer to a basic homeowner's policy that covers property, contents and liability, or to a dwelling policy that only covers the property itself. The policy requirements vary between mortgage companies, so always ask for a specific definition.

Which do you need?

Every homeowner should carry homeowner's insurance. If you live in a flood zone or an area prone to earthquakes, you'll need to purchase specific policies to cover these natural hazards.

Source:

HomeownersInsuranceQuestions: What Is the Difference Between Hazard Insurance and Homeowners

HDAInsurance: California Homeowners Insurance

Resource:

NFIP